The State Of Maharashtra Through ... vs Valu Yesu Suryavanshi (Nhavi) And ... on 17 January, 2008

Equivalent citations: 2008 (3) BomCR 181, 2008 (110) Bom L R 577

Author: S Kumar

Bench: S Kumar, J Devadhar

JUDGMENT
Swatanter Kumar, C.J.

Page 0582

1. All the above 49 First Appeals are directed against the common judgment and award dated 23rd September, 2005, made by the IInd Ad-hoc Additional District Judge, Nashik. As identical question of fact and law arise in these appeals, it will be appropriate to dispose of these appeals by a common judgment.

2. The relevant facts are that Special Land Acquisition Officer ("SLAO") published a notification under Section 4 of the Land Acquisition Act, 1894 (hereinafter referred to as "the Act") for acquiring lands from different villages including Nandadgaon, Tal. Igatpuri, Dist. Nashik for construction of Mukane Dam Project. It may be noticed that lands from number of other villages had also been acquired by different notifications. The possession of the land under the Award was taken on 1st July, 1994, of course, except mentioning by the State there is no evidence on record, documentary and oral, to show as to how and when the possession was taken. However, we will proceed to decide even this aspect on the basis of the record before the Court.

Page 0583

3. The SLAO had issued a declaration under Section 6 of the Act on 3rd August, 1994. After hearing the owners of the land, the SLAO made and published his award on 8th August, 1995. Vide this award, uniform compensation was awarded to the claimants at the rate of Rs. 55,500/- per hectare, however, in one or two cases the compensation was awarded by the Collector varying between Rs. 40,000/- and Rs. 83,000/-. The claimants being dissatisfied from the awarded compensation preferred references under Section 18 of the Act which were referred by the SLAO to the Reference Court. After permitting the parties to lead evidence, the Reference Court vide its judgment dated 23rd September, 2005, allowed the enhancement and awarded a sum of Rs. 1,71,778/- per hectare uniformly to all the claimants. Aggrieved from the judgment of the Reference Court, the State has filed all the above 49 appeals. Though the claimants had demanded compensation at the rate of Rs. 4,00,000/- per hectare for bagayat land and Rs. 1,00,000/- per hectare for pot kharab land before the Reference Court, they have not preferred any appeals or cross- appeals before this Court.

4. The contentions raised on behalf of the State are that (a) the Reference Court has awarded excessive compensation, (b) the Reference Court could not have awarded enhancement on the value of the land indicated in sale instance Exhibit-23, and (c) the findings of the Reference Court are not based upon proper evidence.

5. Vide Exhibit-23, land admeasuring about 32 ares had been sold on 2nd January, 1990 which obviously means that a small piece of land was sold and the learned Reference Court ought to have made some deduction on account of the fact that the present case was of large acquisition and value indicated for a small size plot would not be a correct basis for determination of fair market value of the land. According to the learned Government Pleader, at least 25 per cent should have been deducted. Lastly that the Reference Court has erred in law in granting benefit of Section 23(1A) to the claimants from the date of notification till the date of award. In the facts and circumstances of the case, the benefit could accrue and ought to have been granted by the Court only upto the date of taking possession which was on 1st July, 1994.

6. The first two arguments raised by the State in the present appeals can be discussed together. The State had led no evidence before the Reference Court. The document at exhibits-23, 38, 39, 48, 49 and 83 is the evidence produced by the claimants. In addition to this documentary evidence, they had also examined Deoram Khandu Khatale (P.W.1), one of the claimants as a witness, whose statement is at Exhibit-19 on record. This witness had stated that his lands were of high quality. He used to take two or three crops in a year. He specifically stated that the lands were of similar quality as that of the surrounding villages viz. Vadivarhe, Muken, Morale, Sanjegaon, etc. While describing the location of the land and its potential, this witness has stated that a hospital, school and electric supply are there. He had filed 7/12 extracts in respect of the lands. Agra Road is stated to be at a distance of 8 Kilometres from the village. In his cross-examination he had admitted that possession of the land was taken on 1st July, 1994. The learned Reference Court rejected all other evidence for different reasons. It also Page 0584 declined to take into consideration the judgment at Exhibit-83 as it related to the lands located in village Mukane. Exhibit 49 which was a sale deed dated 5th March, 1992 from the same village i.e. Nandadgaon was rightly not looked into by the Reference Court or made the basis for determination of compensation as the price indicated in that sale deed was even below the compensation awarded by the Collector. The judgment of the Reference Court is entirely based upon copy of sale deed Exhibit-23. The learned Government Pleader appearing for the State and the counsel appearing for the claimants also agreed that there was no direct, relevant and comparable piece of evidence on record from the same village except Exhibit-23 and that could safely be made the basis for determination of fair market value of the land on the relevant date i.e. 23rd May, 1994. Exhibit-23 is the sale deed dated 2nd January, 1990 vide which land admeasuring 32 ares from Gat No. 155 was sold for a sum of Rs. 40,000/-. This sale deed was produced by Nivrutti s/o Kisan Randive (P.W.2), who is the purchaser of the land in question. On this basis, the value of the lands would be at the rate of Rs. 1,22,699/- per hectare. The learned Reference Court had, while taking this as a base value for the year 1990 for each subsequent year till the date of notification under Section 4 of the Act, increased the value at the rate of 10 per cent per year and without making any deduction awarded the sum of Rs. 1,71,778/-. In this regard, the Court had relied upon the judgment of the Supreme Court in the case of L.A.O v. Mohammad Ali . The learned Reference Court did not treat Exhibit-23 as a sale instance relating to a small piece of land. In fact, as it appears from the record, State had never objected or raised this issue before the Reference Court. Once no issue was raised before the Reference Court, it would hardly be permissible for the State to raise this point for the first time in appeal before this Court. Furthermore, 32 ares is very close to an acre as 40 ares make an acre. Thus, it cannot be treated such a small piece of land that it would justify application of principle of deduction on the basis of smallness of land subject matter of sale. Even otherwise, the Court has to keep in mind that the value of the land increases and the claimants in fact had claimed compensation at the rate of Rs. 4 lakhs per hectare. The extent of land, which is subject matter of Exhibit-23 , thus cannot be termed as such a small piece of land, that deduction at the rate of 25 per cent should be applied in the facts and circumstances of the present case. It is an admitted fact that the lands of surrounding villages had already been acquired. The State has not produced any evidence on record to show that it will be either unreasonable or unfair to grant increase to the claimants at 10 per cent. Exhibit-23 had shown the value at the rate of Rs. 1,22,699, while Exhibit-39 which was a sale deed of 29th January, 1992 relating to village Mukane had shown the value at the rate of Rs. 2,12,500/- per hectare. This sufficiently indicates that there was an increasing trend in the sale price of the land of the surrounding villages of village Nandadgaon. The increase given by the Reference Court, in such circumstances, is neither unreasonable nor excessive, examined in the light of the basic features contained in Section 23 of the Act.

Page 0585

7. The Delhi High Court in the case of Smt. Omwati v. Union of India and Anr. L.A. Appln. No. 94/2006 reported in 2006 (90) DRJ 324, dealing with the factors to be considered for awarding compensation held as under.

The learned Counsel appearing for the respondent, Union of India, while relying on the judgment of the Supreme Court in the case of Virender Singh v. Union of India argued that small pieces of land cannot at all be looked into by the courts while determining the compensation payable to the claimants for acquisition of vast stretches of lands. Firstly, this is, in our view not a correct reading of the judgment of the Supreme Court and secondly, the facts of that case were entirely different. Their Lordships of the Supreme Court held that "small bit of transaction would not be determinative factor for deciding the market value of vast stretch of land" where the land was acquired to the extent of 5,484 bighas and only one bigha vide Exh. A1 was made the basis for awarding the compensation by the Court, and the same was not accepted by the Supreme Court. In the present case, the acquisition is only of 971 bighas but the sale instances placed on record by the claimants as well as the respondents were of land measuring 1 bigha to 4 bighas, as such these sale deeds cannot be treated at parity 24th Exh.A1 (in the case of Ramphool and Anr. v. Union of India 1998 V AD (Delhi) 433). It will be impracticable to imagine that the claimants or even respondents are expected to tender evidence of sale transactions where hundreds of bighas have been purchased or sold in acquisition proceedings or even sale of few hundreds of bighas. No individual person and for that matter, even a corporate body would sell or buy the lands in hundreds of bighas in a place like Union Teritory of Delhi, where yards of lands cost thousands of rupees. To require parties to lead such evidence is an illusory submission rather than a pragmatic view. We may also refer to a judgment of the Punjab & Haryana High Court in the case of Baldev Singh v. State of Haryana 1999 (3) PLR 141 where the court discussed this aspect as well as the aspect of the notified lands being surrounded by the boundaries of the revenue estates of other villages and its impact on the fixation of the compensation payable. The Court after detailed discussion held as under:

14. One can hardly trace any element of disparity between the case of Harpal Singh and the present appeals. In both the caases, the lands were acquired by the same notification dated 26.5.1981. Lands were acquired by a common notification in the revenue estates of all the three villages i.e. Patti Mehar, Jandli and Sounda. It is also an admitted case and is equally reflected by the site plans Ex. P.10 and Ex. P.11. The boundaries of the three revenue estates of these villages is common. In other words, the lands of each of these villages are adjacent to other while Page 0586 part of the land of Patti Mehtar prior to the present acquisition was in Municipal Limits. This has been so reflected in the cases of Pala Singh and Sudesh Kumar (Ex.P.9).The lands acquired are at a distance from the grain market while those places were fully commercialised and developed when the lands in those areas were acquired. Thus, I find it difficult to plainly follow the said criteria for awarding the compensation in the present case. The necessary corollary thereto would be to make a reasonable deduction/cut from such amounts and to implement the rule of uniform compensation as aforeindicated to award the compensation which has been awarded in other connected cases for such similar lands. The lands in other cases are comparable or even somewhat similar. They have been acquired for one and the same purpose and, thus, difference of part of the land from the other land acquired would not be of great significance.

15. For the reasons aforestated, I allow these appeals and enhance the compensation for acquisition of the lands of the land owners to Rs. 2,91,800/- per acre. The land owners claimants would be entitled to statutory benefits under Sections 23(1A), 23(2) and 28 of the Act in accordance with law. However, in the facts and circumstances of the case, there would be no orders as to costs. The appeals are, accordingly, allowed, limited to the above extent.

It cannot, however, be laid down as an absolute proposition that the rates fixed for the small plots cannot be the basis for fixation of the rate. For example, where there is no other material it may in appropriate cases be open to the adjudicating Court to make comparison of the prices paid for small plots of land. However, in such cases necessary deductions/adjustments have to be made while determining the prices.

8. In the case of Suresh Kumar v. Town Improvement Trust, Bhopal (1989) (1) SVLR (C) 399), in a case under the Madhya Pradesh Town Improvement Act, 1960, this Court held that the rates paid for small parcels of land do not provide a useful guide for determining the market value of the land acquired. While determining the market value of the land acquired it has to be correctly determined and paid so that there is neither unjust enrichment on the part of the acquirer nor undue deprivation on the part of the owner. It is an accepted principle as laid down in the case of Vyricheria Narayana Gajapatiraju v. Revenue Divisional Officer, Vizagapatnam that the compensation must be determined by reference to the price which a willing vendor might reasonably expect to receive from the willing purchaser.

The ground urged before us is that in view of the decision in Kunwar Singh v. Union of India contiguity of villages could not by itself be sufficient to draw an inference of similarity in character of the lands in awarding the compensation and, therefore, the reasoning of the High Court is not correct. The High Court indeed did not rely upon the contiguity of the lands alone but if found that the nature/quality of the lands is by and large similar to those lands considered in Satpal's case. If that is the finding of the High Court, we do not think there would be any justification to make any distinction between lands which had been lying in Palam and Shahbad Mohamadpur. Therefore, the view taken by the High Court cannot be faulted with. The High Court also found that it would be unfair to discriminate between the land owners to pay more to some and less to others when the purpose of acquisition is same and lands are identical and similar, though lying in different villages, we find the judgment of the High Court to be fair and reasonable and no interference is called. Therefore, the appeals stands dismissed.

18. It may also be noticed that certain principles relating to this aspect were also enunciated by the Supreme Court in the case of The Land Acquisition Officer, Revenue Divisional Officer, Nalgonda (A.P) v. Morisetty Satyanarayana and Ors. 2002 (1) All India Land Acquisition and Compensation Cases 1. Amongst others it was held that normally, the Court would not consider post notification sale instances and an order based upon such instances may be held to be erroneous. Where the Court basis its findings on sale instances relating to small pieces of lands belonging to different persons, deduction is required to be made. But wherever there is an increase in the market price of the land during the relevant years, then applying the development deduction on these grounds would not be necessary. These principles are to be kept by the Court in mind while determining the compensation payable to the claimants.

It was also contended on behalf of the claimants that the land of each individual is being acquired. Thus the question of acquisition of larger piece of land has no relevance. There are claimants who own small pieces of land while others may be owners of larger chunk of land. There cannot be any straightjacket formula to determine compensation payable to the claimants. Sale instance of nearly an acre of land cannot fairly be termed as a small piece of land. The matters must be examined and evidence must Page 0588 be understood by the Court in its correct perspective and while keeping the ground realities in acquisition matters in mind. A Full Bench of this Court in the case of State of Maharashtra v. Prashram Jagannath Aute held that the analytical examination of the principles of law would lead to no other conclusion but that determination of market value of acquired land has to be done on the facts of each case, existing statutory guidelines stated in Sections 23 and 24 of the Act and in the backdrop of judicial pronouncements controlling exercise of jurisdiction under Section 18 of the Act. The learned Government Pleader appearing for the State relied upon a Division Bench judgement of this Court in the case of State of Maharashtra v. Smt. Fulyabai Kisan Govardhane and Ors. First Appeal No. 1171 of 2007 decided on 23rd August, 2007, to contend that the judgment would have bearing on the present case and particularly in relation to the deduction of 25 per cent from the awarded compensation. At the very outset, we may notice that that was a judgment on its own facts. Furthermore, in that case the Court had granted compensation only on the basis of Exhibit-42, the sale instance relating to 13 ares of land which was old for Rs. 15,000/- at the relevant time and, therefore, the Court had applied 25 per cent deduction. In the present case, the sale instance is of a large land i.e. nearly an acre, thus on any principle the said judgment would have no application to the facts of the present case.

10. Against the Award, the First Appeal was filed before the High Court. Primarily, it was contended before the High Court that the Tribunal had not properly evaluated the evidence on record and wrongly placed reliance on a sale deed relating to a small piece of land. It was also submitted that without any proper appreciation of materials on record the compensation was enhanced.

11. Stand of the respondents before the High Court was that there was no illegality in the Award passed by the Reference Court. It was submitted that the land was situated near densely populated area having great potential value and the appellate authority is selling the same land at the rate of Rs. 300/- per sq.ft. The reference court on the basis of oral and documentary evidence has awarded compensation at the rate of Rs. 6/- per sq.ft. Along with other benefits as provided under the Act. The High Court found that the claimants had filed number of sale deeds of varying rates ranging between Rs. 10/- per sq.ft. to Rs. 5/- per sq.ft. but the sale deed relating to the plot No. 166 situated at Mahibullahpur was relied upon by the Tribunal and the reasons for enhancing the compensation were assigned which according to the High Court did not call for any interference. The High Court did not find any substance in the plea of the appellant that the sale deed Page 0589 ( Exh. C-38)was unduly relied upon by the Tribunal. It was pointed out that the sale deed is related to a very small piece of land as against the large area of more than 10 bighas involved in the present case. The High Court referred to certain decisions of this Court to hold that while determining the market value of the land, the potentiality of the land is a very material consideration and several factors like location of the land, its surroundings, available facilities thereon in the vicinity, nature of the land have to be taken into account. The High Court also found that there was no similarity between the land which was the subject matter of dispute in land acquisition case No. 204 of 1992 where the rate fixed was Rs. 1.85 per sq.ft.

16. It cannot, however, be laid down as an absolute proposition that the rates fixed for the small plots cannot be the basis for fixation of the rate. For example, where there is no other material it may in appropriate cases be open to the adjudicating Court to make comparison of the prices paid for small plots of land. However, in such cases necessary deductions/adjustments have to be made while determining the prices.

17. In the case of Suresh Kumar v. Town Improvement Trust, Bhopal (1989) (1) SVLR (C) 399) in a case where the Madhya Pradesh Town Improvement Trust Act, 1960, this Court held that the rates paid for small parcels of land do not provide a useful guide for determining the market value of the land acquired. While determining the market value of the land acquired it has to be correctly determined and paid so that there is neither unjust enrichment on the part of the acquirer nor undue deprivation on the part of the owner. It is an accepted principle as laid down in the case of Vyricherla Narayana Gajapatiraju v. Ravenue Divisional Officer, Vizagapatnam that the compensation must be determined by reference to the price which a willing vendor might reasonably expect to receive from a willing purchaser. While considering the market value, disinclination of the vendor to part with his land and the urgent necessity of the purchaser to buy it must alike be disregarded, neither must be considered as acting under any compulsion. The value of the land is not to be estimated as its value to the purchaser. But similarly this does not mean that the fact that some particular purchaser might desire the land more than others is to be disregarded. The wish of a particular purchaser, though not his compulsion may always be taken into consideration for what it is worth. Section 23 of the Act enumerates the matters to be considered in determining compensation. The first criterion to be taken into consideration is the market value of the land on the date of the publication of the notification under Section 4(1).

Similarly, Section 24 of the Act enumerates the matters which the Court shall not take into consideration in determining the compensation. A safeguard is provided in Section 25 of the Act that the amount of compensation to be awarded by the Court shall not be less than the amount awarded by the Collector under Section 11. Value of the potentiality is to be determined on such materials as are available and without indulgence in any fits of imagination. Page 0590 Impracticability of determining the potential value is writ large in almost all cases. There is bound to be some amount of guess work involved while determining the potentiality.

18. It can be broadly stated that the element of speculation is reduced to minimum if the underlying principles of fixation of market value with reference to comparable sales are made:

(i) when sale is within a reasonable time of the date of notification under Section 4(1);

(ii) it should be a bona fide transaction;

(iii) it should be of the land acquired or of the land adjacent to the land acquired; and

21. The deduction to be made towards development charges cannot be proved in any straitjacket formula. It would depend upon the facts of each case.

Keeping in view the facts and circumstances of the present case and the principle aforeindicated, we do not think that the learned Reference Court had returned the finding by enhancing the compensation without any evidence on record or by violating any principle of law. Thus the first two contentions raised on behalf of the State are rejected.

9. Coming to the third argument raised on behalf of the State in regard to grant of benefit to the claimants under Section 23(1A) of the Act, at the very outset we may notice the findings recorded by the Reference Court while granting relief to the claimants.

17. In the case of Gulabrao v. State of Maharashtra Hon'ble Bombay High Court held that a claimant is entitled for 30% solatium on the amount of compensation. In view of these observations, the claimants in these cases will get 30% solatium. The claimants requested for providing additional compensation in terms of component on the Value of the Property from the date of taking possession. The evidence of PW-1 Deoram reveal that the possession of the lands from the claimants was taken on 1/7/1994. The claimants filed possession receipt Exh. 84 to show that the possession of their fields was taken on 1/7/1994. The Government is not coming with any evidence as to when the possession of the property was taken. So, I rely on the possession receipt at Exh. 84 issued by the responsible Officer of the acquiring body and come to the conclusion Page 0591 that then possession of the lands was taken on 1/7/1994. Hon'ble Apex Court, in the case of Siddappa Vasappa Kuri and Anr. v. Special Land Acquisition Officer and Anr. , while interpreting Section 23(1A) of the Land Acquisition Act, held:

It is clear from Section 23(1A) that the starting point for the purposes of calculating the amount of additional compensation to be awarded thereunder, at the rate of 12 per cent per annum on the market value, is the date of publication of the Section 4 notification. The terminal point for the purpose is either the date of the award or the date of taking possession, whichever is earlier. In the present case, the possession of the land having been taken prior to the publication of the Section 4 notification that terminal is not available. The only available terminal is the date of the award. Therefore, where possession of land was taken on 1st June, 1977 and notification under Section 4(1) in relation to the said land was issued thereafter on 8th March, 1991 the owners were entitled to additional compensation under Section 23(1A) from date of Section 4 notification viz. 8th March, 1991 to the date of Award namely 6th Feb. 1992. The owners were not entitled to additional compensation from the date on which possession of land was taken viz. 1st June, 1977 to the date on which, Section 4 notification was issued.

10. The State apparently had not put forward any substantive plea or arguments in support of the contention that the benefit of Section 23(1A) should be given to the claimants from the date of the award and not from the date of possession 1st July, 1994. It can hardly be disputed that in terms of the language of Section 23(1A) of the Act, additional benefit has to be granted to the claimants from the date of notification under Section 4 of the Act till the date of possession or the date of the Award whichever is earlier. Section 23(1A) of the Act reads as under:

23. Matters to be considered in determining compensation:

...

(1A) In addition to the market value of the land, as above provided, the Court shall in every case award an amount calculated at the rate of twelve per cent per annum on such market-value for the period commencing on and from the date of the publication of the notification under Section 4, Sub-section (1) in respect of such land to the date of the award of the Collector or the date of taking possession of the land, whichever is earlier.

Explanation In computing the period referred to in this sub-section, any period or periods during which the proceedings for the acquisition of the land were held up on account of any stay or injunction by the order of any Court shall be excluded.

A bare reading of the above provision shows that the additional benefit is admissible in law and payable to the claimants for the period commencing Page 0592 from the date of publication of notification Section 4 of the Act till possession or date of award whichever is earlier. The most important expression in the provision of Section 23(1A) wherever the additional benefit is to be given till the date of possession is "possession". The word "possession" has been explained differently in different contexts. In the Law Lexicon, 1977 Edition, the word "possession" defines thus:

Possession referred to in Section 14 need not be actual physical possession or personal occupation of the property by the Hindu female but may be possession in law. The possession of a licensee, lessee or a mortgagee from the female owner or the possession of a guardian or a trustee or an agent of the female owner would be her possession for the purpose of Section 14. The word "possessed" is used in Section 14 in a broad sense and in the context possession means the state of owning or having in one's hands or power. Kotturuswami v. Setra Veeravva .

The word "possession" in the section cannot possibly be held to mean anything other than lawful possession or possession as owner. The meaning of the word "possession" cannot be limited to actual possession. The possession of a licensee, lessee or mortgagee from a female owner or the possession of a guardian or trustee or an agent of the female owner would be her possession for purposes of Section 14 Mst. Bakhtawari v. Sadhu Singh 1959 Punj 558, 560.

Possession is a detention or enjoyment of a thing which a man. Holds or exercises by himself or by another, who keeps or exercises it in his name.

"Possession" is said to be in two ways-either actual possession or possession in law.

"Actual possession" is when a man entreth into lands or tenements to him descended, or otherwise.

"Possession in law, is when lands or tenements are descended to a man, and he hath not as yet really, actually, and in deed entered into them ; And it is called possession in law because that in the eye and consideration of the law, he is deemed to be in possession, inasmuch as he is liable to every mans action that will sue concerning the same lands or tenements (Termes de la ley, Possession).

11. The Supreme Court on "Words and phrases, published by Ashoka Law House, Edition 2004, at page 812, the "possession" has been described as under:

"Possession" is a polymorphous term, which may have different meaning in different contexts. It is impossible to work out a completely Page 0593 logical and precise definition of "possession" uniformally applicable to all situations in the contexts of all statutes. Dias and Hughes in their book on Jurisprudence say that if a topic ever suffered from too much theorizing it is that of "possession". Much of this difficulty and confusion is (as pointed out in Salmond's Jurisprudence, 12th Edition, 1966) caused by the fact that possession is not purely a legal concept. "Possession", implies a right and a fact; the right to enjoy annexed to the right of property and the fact of the real intention. It involves power of control and intent to control (See Dias and Hughes, ibid.) According to Pollock and Wright, when a person is insuch a relation to a thing that, so far as regards the thing, he can assume, exercise or resume manual control of it at pleasure, and so far as regards other persons, the thing is under the protection of his personal presence, or in or on a house or land occupied by him or in any receptacle belonging to him and under his control, he is in physical possession of the thing. While recognizing that "possession" is not a purely legal concept but also a matter of fact, Salmond (12th Edition, page 52) describes "possession", in fact, as a relationship between a person and a thing. According to the learned author the test for determining "whether a person is in possession of anything is whether he is in general control of it." The question whether a particular person is or continues to be in possession of an arm (in the context of the Arms Act) is, to a substantial extent, one of fact. This question, often resolves into the issue; whether that person is or continues to be, at the material time, in physical possession or effective control of that term. This issue, in turn, is a mixed issue of fact and law, depending on proof of specific facts or definite circumstances by the prosecution. Superintendent and Remembrancer of Legal Affairs, West Bengal v. Anil Kumar Bhuna and Ors. (See also Seksaria Cotton Mills Ltd. v. State of Bombay ).

The expression "possession" is a polymorphous term, which assumes different colours in different contexts. It may carry different meanings in contextually different backgrounds. The word "possession" means the legal right to possession. Madan Lal and Anr. v. State of H.P. . It is impossible to work out a completely logical and precise definition of "possession" uniformally applicable to all situations in the context of all statutes. Megh Singh v. State of Punjab .

The word "possession" has different shades of meaning and it is quite elastic in its connotation. "Possession" and 'ownership' need not always go together but the minimum requisite element, which has to be satisfied, is custody or control over the goods. Avtar Singh and Ors. Page 0594 v. State of Punjab (See also Madan Lal v. State of H.P. .

12. The possession is a legal right and it must arise legally. For possession to be accepted in law, the Court should be satisfied that possession has been acquired by the concerned party by due process of law and is not result of an unlawful act. Now let us examine the legislative scheme in relation to taking over of possession by the Government or its agencies under the provisions of the Act. The provisions of the Act contemplate only two methods for acquiring possession in accordance with law. Firstly, the Government acting through the Collector and after issuance of the notification under Section 4 and declaration under Section 6 of the Act is required to serve notice to all interested persons under Section 9(1) of the Act informing that the Government intends to take possession of the land and interested persons may make their claim for compensation in such land to him. The Collector thereupon shall conduct an enquiry as contemplated under Section 11 of the Act and make his award determining the market value of the acquired land. It is only after this procedure is completed that the Collector is entitled to take possession as per the provisions of Section 16 of the Act and then alone the land shall vest absolutely in the Government free from all encumbrances. Secondly, the legislature has vested special powers in the Appropriate Government to direct the Collector to take immediate possession under different circumstances by invoking the urgency clause. The Collector is empowered to take possession for immediate public purpose by serving fifteen days' notice even where no award has been made in terms of Section 11 of the Act. The Collector is even empowered to take possession by giving 48 hours notice but for possession in terms of Sub-sections (1) and (2), the statute casts an obligation upon the said authority to pay compensation to the claimant. This compensation could be in relation to damage to any crop, structure, water supply, etc. and in any case before taking possession of the land the Collector, in terms of Section 17(3A)(a) of the Act has to tender payment of 80 per cent of the compensation for such land as estimated by him to persons whose lands are acquired. The law requires that the compensation should be paid to the claimants unless and until the Collector is prevented by circumstances postulated under Section 31 of the Act. Even if that be so, still the Collector would be required to deposit the compensation in the Court as commanded under Section 31 of the Act. In other words, the Government is entitled to take immediate possession of the land but only and upon making payment of 80 per cent of the proposed market value of the land in question. There is no other way by which the Government or any other instrumentality of the Government can take possession of the land under the provisions of the Act. The Legislature has emphasized the need for payment of compensation prior to taking physical possession of the property in either case. The Court cannot ignore the fact that these are cases of compulsory acquisition and compliance to the statutory provisions would be mandatory. The State cannot take benefit of any of the provisions Page 0595 of the statute without satisfying the requirements or conditions precedent to such invocation. This onus is clearly upon the State to show that they have taken the possession of the land in accordance with the provisions of the Act and the term possession is "lawful possession". When the Act in no uncertain terms provides the methodology which is to be adopted by the authorities of the State in taking possession then it is mandatory for these authorities to take possession only in accordance with the provisions and no other way. Possession must be taken by a duly authorized person and in accordance with law. There is no necessity for the authorities of the State to create a mechanism of taking possession which is not in conformity with the statutory requirements. The State cannot defend against the provisions of law.

13. In the case of R.L. Jain (D) by Lrs. v. DDA and Ors. the Supreme Court took the view that the possession taken prior to issuance of notification under Section 4(1) of the Act which was a sine qua non for any further proceedings, the claimants would not be entitled to any benefit from the date of possession unless notification under Section 4 of the Act was issued. This being a compulsory acquisition, the State exercises its powers of eminent domain and land is vested in the State only when the provisions of the Act are complied with. In relation to possession, the Supreme Court held as under.

...Section 11 provides for making of an award by the Collector of the compensation which should be allowed for the land. Section 16 provide that when the Collector has made an award under Section 11, he may take possession of the land which shall thereupon vest absolutely in the Government free from all encumbrances. This provision shows that possession of the land can be taken only after the Collector has made an award under Section 11. Section 11 is in the nature of an exception to Section 16 and it provides that in cases of urgency, whenever he appropriate Government so directs the Collector, though no such award has been made, may, on the expiration of fifteen days from the publication of the notice mentioned in Section 9(1), take possession of any land needed for a public purpose and such land shall thereupon vest absolutely in the Government, free from all encumbrances. The urgency provision contained in Section 17(1) can be invoked and possession can be taken over only after publication of notification under Sections 4(1) and 6 of the Act. Even here in view of Sub-section (3-A) the Collector has to tender 80 per cent of the estimated amount of compensation to the persons interested/entitled thereto before taking over possession. The scheme of the Act does not contemplated taking over of possession prior to the issuance of notification under Section 4(1) of the Act and if possession is taken prior to the said notification it will be dehors the Act. It is for this reason that both Sections 11(1) and 23(1) enjoin the determination of the market value of the land on the date of publication of notification Page 0596 under Section 4(1) of the Act for the purpose of determining the amount of compensation to be awarded for the land acquired under the Act. These provisions show in unmistakable terms that publication of notification under Section 4(1) is the sine qua non for any proceedings under the Act. Section 34 of the Act, on the basis whereof the appellant laid claim for interest, reads as under:

34. Payment of interest. When the amount of such compensation is not paid or deposited on or before taking possession of the land, the Collector shall pay the amount awarded with interest thereon at the rate of nine per centum per annum from the time of so taking possession until it shall have been so paid or deposited.

Provided that if such compensation or any part thereof is not paid or deposited within a period of one year from the date on which possession is taken, interest at the rate of fifteen per centum per annum shall be payable from the date of expiry of the said period of one year on the amount of compensation or part thereof which has not been paid or deposited before the date of such expiry.

12. The expression " the Collector shall pay the amount awarded with interest thereon at the rate of nine per centum per annum from the time of so taking possession until it shall have been so paid or deposited" should not be read in isolation divorced from its context. The words "such compensation" and "so taking possession" are important and have to be given meaning in the light of other provisions of the Act. "Such compensation" would mean the compensation determined in accordance with other provisions of the Act, namely, Sections 11 and 15 of the Act which by virtue of Section 23(1A) mean market value of the land on the date of notification under Section 4(1) and other amounts like statutory sum under Sub-section (1-A) and solatium under Sub-section (2) of Section 23. The heading of Part II of the Act is "Acquisition" and there is a subheading "Taking Possession" which contains Sections 16 and 17 of the Act. The words "so taking possession" would therefore mean taking possession in accordance with Section 16 and 17 of the Act. These are the only two sections in the Act which specifically deal with the subject of taking possession of the acquired land. Clearly, the stage for taking possession under the aforesaid provisions would reached only after publication of the notification under Sections 4(1) and 9(1) of the Act. If possession is taken prior to the issuance of the notification under Section 4(1) it would not be in accordance with Section 16 and 17 and will e without any authority of law and consequently cannot be recognized for the purpose of the Act. For parity of reasons the words "from the date on which he took possession of the land" occurring in Section 28 of the Act would also mean lawful taking of possession in accordance with Section 16 and 17 of the Act. The words " so taking possession" can under no circumstances mean such dispossession of the owner of the land which has been done prior to publication of Page 0597 notification under Section 4(1) of the Act which is dehors the provisions of the Act.

14. If the authorities plead that possession has been taken by virtue of agreements, then those agreements have to be placed on the Court record. Admittedly when no compensation was paid to the claimants before taking possession either in terms of the Award made by the Collector in terms of Section 11 of the Act or the statutory compensation contemplated under Section 11(2) of the Act, a protection in the nature of a legal right has been provided by the Legislature to the owners of the land that the possession of the lands should be taken in accordance with the prescribed procedure and upon payment of the specified amount. Infringement of either of them is bound to vest the owners with civil consequences. It would have the effect of depriving them of the benefits which are available to them under the scheme of the Act. Such an interpretation or approach would be impermissible.

15. In the present case, no documents have been filed on record to show that the possession was taken by agreement either with the Government or the acquiring body for the benefit of which the land was acquired. Of course, it will still remain to be examined in law, whether such a body would have the right to take possession directly from the owners. It may further be notified that the State has not even care to place on record the kabje pavti (possession receipt). Even in the memorandum of appeal it has not been stated as to how and when the possession was taken. The only document which can be of some help is Exhibit-84 which in terms says that the possession was taken by the Executive Engineer, Nandur Madhyameshwar Project, along with Deputy Divisional Engineer, Mukane Dam Sub-Division No. II on 1st July, 1994. In this document, it is nowhere reflected that the possession has been taken by agreement. In fact, it is clear that the possession was taken without payment of compensation or by any mutual pact between the parties. The claimants, in fact, have claimed compensation and additional benefit from the date of acquisition till the date of the award.

16. In view of our discussion aforestated, we dismiss all the appeals and hold that the compensation awarded by the Reference Court is just, fair and in consonance with the provisions of Section 23 of the Act. Further, we direct that the claimants would be entitled to the additional benefit under Section 23(1A) of the Act from the date of notification i.e. 23rd May, 1994 upto the date of the Award i.e. 8th August, 1995.

17. In view of the dismissal of the appeals, all the Civil Applications have been rendered infructuous and are accordingly disposed of. We do hope that the compensation awarded shall be disbursed to the claimants expeditiously.